Further to the announcement regarding the Non-Habitual Tax Residency Programme last week referred to in our NHR 2023 Briefing 1, and the publication of the Draft Budget for 2024 on 10th October, we can now update you as follows.


Reminder – Benefits of the NHR in brief

After registering as Portuguese tax resident, and applying successfully, NHRs will immediately be able to enjoy the benefits of the programme including: a preferable tax rate on pension (10%); and an exemption on salary, consulting, dividend, royalty, interest and property income, provided certain conditions are met. NHRs can also benefit from a flat rate of tax of 20% on certain sources of Portuguese income.


How has the draft Budget changed the NHR programme?

  1. Status of proposed changes

The Budget is still in draft form and therefore nothing has changed for now. There will be an intensive period of up to two months of voting and discussions on the whole Draft Budget, during which the initial draft will normally change.

  1. Deadline for registration under the existing NHR programme

According to the Draft, registration as tax resident can be made under the existing NHR programme on or before 31st December 2023. This registration as tax resident will satisfy the NHR application requirement, provided that the NHR registration is then made on or before 31st March 2024.

In addition to this, the draft states that NHR registrations can be successfully made on or before 31st March 2024 provided that the applicant has a valid residency visa as at 31st December 2023.
Subject to the above, after 31st December 2023 new applications for the NHR programme will not be accepted.

  1. Status of existing NHRs

The benefits enjoyed by existing NHRs, and NHRs registered on or before 31st December 2023, will be maintained in full for the remainder of the 10 year period.


New tax programme - Incentivised Tax Status (“ITS”)

Under the new ITS programme created by the Draft, the following benefits will be available.

  • 20% Rate

Professionals exercising certain activities will be entitled to a flat tax rate of 20% for 10 years.

  • Exemption on capital income

Professionals exercising these activities will be exempt from tax on foreign capital income including dividends, royalties, interest, property income and capital gains.

  • 50% Exemption

A tax exemption on 50% of professional income (including self-employment/consulting income) up to the amount of €250,000 for a period of 5 years.

Please note that the details of the ITS are likely to change before the Budget is approved and therefore we will keep you informed of developments as they occur.



Our current view is that the range of benefits which are available under the current NHR programme will not be available under the ITS. Whilst personal taxation incentives for new tax residents will continue, based on the draft Budget, these will be considerably narrower. In addition, it will take some time for the changes under the ITS to be fully tested, as was the case with the introduction of the NHR in 2009.



There is still time to apply for the NHR

Given the above, and the more restrictive benefits available under the ITS, it is our recommendation that, if you are interested in living in Portugal and enjoying a wide range of tax benefits, that you consider applying for the NHR programme now. There is still time to do so and different conditions will apply, depending upon whether you are an EEA/Swiss national or third country national.


12th October 2023


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